Shareholder disputes: Prevention and resolution

Having disputes with others is something that most adults will have to deal with at some point in their life. While most of these don't amount to much, there are some instances in which the disputes have high stakes. One example is when shareholders in a private corporation or a limited liability company don't see eye to eye.

Having a dispute amongst shareholders can tear a company apart. Because of this, it's imperative that these disputes are handled properly and as swiftly as possible. Not only are there several options that you can focus on that might prevent these disputes, there are also some techniques that help to address them when they occur.

Take emotions out of the decisions

In business matters, it's best to think about the fate of the business. You have to look at things from a logical standpoint. It's easy to become emotional when you want your way, but you can't allow those emotions to cloud your judgement. It helps to take a step back and refocus on how each option will directly impact the company.

Set duty boundaries

The individuals who are in charge of the business should have clear duties. You should empower them to make the decisions that are in their area. However, it might be time to step in if those decisions aren't moving the company forward. Before you try to go against what your in-house experts are saying or doing, take the time to find out the methodology and reasoning behind their decisions.

Compromise

Being willing to compromise to settle the dispute is often the best avenue. You can call a shareholder meeting and try to work things out there. Bringing in a mediator might be beneficial. While it is possible to settle things through litigation, it's usually best to try to resolve things in an informal manner. You may even need to hold a session for the shareholders to vote on the solution.

If you realize that you do need to take legal action, be sure that you consult your attorney. This should be the final attempt at getting the matter resolved.